By Saeed Azhar and Lananh Nguyen
(Reuters) – Companies and households are feeling better about the economy despite elevated uncertainty and recession predictions, the heads of top U.S. banks said Tuesday.
Goldman Sachs Group Inc. Chief Executive Officer David Solomon said sentiment among business leaders has improved. His counterpart at Bank of America Corp, Brian Moynihan, cited resilient consumer finances and spending as positive signs. But both leaders cited risks to the economy, including inflation, and said they would keep a lid on hiring this year to constrain costs.
“While it’s still very, very uncertain, the consensus has shifted to be a little bit more dovish in the CEO community that we can navigate through this in the United States, with a softer economic landing than what people would have expected six months ago,” Solomon told investors at a conference in Florida.
At a separate event, Bank of America’s CEO reiterated what he has been saying for months – that consumer spending remains robust and is underpinning the economy.
“Consumers remain very solid,” Moynihan told investors in New York. “Their balances are strong, their credit availability is strong, and the spending activity in January actually picked up a little bit.”
Not all bank executives were so sanguine.
Wells Fargo & Co Chief Financial Officer Mike Santomassimo told the Florida conference that “things are going to continue to get a little worse” when asked about the potential for a recession. While consumer spending remains healthy, credit card delinquencies are increasing, and growth in Wells Fargo’s commercial bank is moderating, he said.
Despite some easing concern about an economic slowdown, the bank chiefs said they were managing headcount to constrain costs. Goldman cut about 3,200 staff, or 6% of its workforce, last month.
“We are in a position to lower the headcount,” Solomon said. “We’ve taken some action — we have a much tighter hiring plan in 2023,” which entails less hiring, he said.
Bank of America will also manage its staffing through attrition. It aims to have a workforce of about 213,000 to 214,000 in the next three to four months, Moynihan said, down from 216,823 at the end of 2022.
(Reporting by Saeed Azhar and Lananh Nguyen in New York and Niket Nishant and Mehnaz Yasmin in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)
